Apple suppliers fall after forecast for slowing iPhone sales

People looking at smartphones at the Apple store in Tokyo, Japan, on April 19, 2016.
People looking at smartphones at the Apple store in Tokyo, Japan, on April 19, 2016. PHOTO: REUTERS

TOKYO (BLOOMBERG) - Apple's suppliers' shares fell in Asia on Wednesday (April 27) after the iPhone maker posted its first quarterly revenue drop in more than a decade and forecast another decline in the current period.

In Tokyo, shares of Taiyo Yuden slumped as much as 5.1 per cent in early trade, while those of Alps Electric and Murata Manufacturing fell 5 per cent and 5.2 per cent respectively - all of them make the basic electronic parts that go into smartphones. The Nikkei 255 Stock Average was little changed.

"The sales drop forecasted by Apple for the April-June period is greater than expected," said Nobuyuki Fujimoto, a senior market analyst at SBI Securities. "The shares of Japanese electronic-component makers are down by association."

Apple's chief financial officer Luca Maestri said demand for the company's flagship product has ebbed following the debut of the larger-screen iPhone 6 and 6 Plus, which led customers to upgrade more quickly.

But Apple is not alone in experiencing a slowdown. Sony last week booked a preliminary impairment charge for the business that makes smartphone camera modules, citing "a decrease in projected future demand."

Global smartphone sales growth will probably slow to 7 per cent in 2016, tech research firm Gartner forecast in March. While users in mature markets are holding on to their handsets longer, potential buyers in Asia may delay upgrading theirs until the functionality and pricing of low-cost devices improves and makes them more desirable, it said.

Alps Electric makes actuators and switches for smartphones, while Murata's products range from capacitors to USB components. Taiyo Yuden manufactures antenna chips and semiconductors that control power supply.

In Taiwan, shares of Catcher Technology, which makes metal housings for smartphones, declined as much as 4.9 per cent in Taipei. Component makers Largan Precision and Zhen Ding Technology Holdings fell 3.1 per cent and 2.7 per cent, respectively, while assembler Pegatron Corp was down 2.3 per cent.